Understanding the Bond Markets

Course Overview

Following the financial market collapse over a decade ago, banks sharply cut back on the availability of credit lines as regulators forced them to hold more capital. Governments subsequently increased borrowing, creating an opportunity for bond markets to become the primary debt funding provider for corporates, supranationals and sovereigns. Understanding these markets is essential for issuers, investors, intermediaries, regulators and fund administrators.

Course Content

• Understanding bond pricing — coupons, par values, yield to maturity
• The bond universe — sovereigns, corporates, Eurobonds, convertibles, exchangeables, floating rate notes, asset-backed, zero coupon
• Bond structures — fixed or floating rate issuance, callable, puttable
• Who owns the UK Gilts market? Does it matter? The role of the central banks
• The advent of green bonds — sustainability and the "greenium"
• Interest rate sensitivity — duration
• Credit risk — from investment grade to junk; from rising stars to fallen angels
• Understanding yield curves and what they tell you
• Investing strategies — credit spread, yield curve, bullets and barbells
• Liability Driven Investment — by whom and why; the importance of pension funds
• Derivatives — Credit Default Swaps: insurance or speculation?

Learning Outcomes

Participants gain a comprehensive understanding of a marketplace which, for good reason, has traditionally had a lower public profile than many other equivalent financial markets such as equities, foreign exchange and commodities.